Mercari (4385) AI Stock Analysis

• Market Cap: ¥525.83B
• Dividend Yield: N/A
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.53
• Revenue Growth: 4.83%
• EPS Growth: 106.29%
• Country: JP
• Employees: 2,080
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 30.30
• Shares Outstanding: 164,889,110
• 10 Day Avg. Volume: 3,724,380
• 30 Day Avg. Volume: 3,051,140
• PEG Ratio: 0.18
• Price to Book (P/B): 4.42
• Price to Sales (P/S): 2.28
• P/FCF Ratio: -35.84
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥3,206.00
• Price Target Upside: 9.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ¥3,651.00 ▲(24.52% Upside)

Overall score is driven mainly by strong profitability and efficient operations, plus a clear upward technical trend. The score is tempered by balance-sheet leverage risk and unfavorable cash-flow dynamics, with valuation remaining reasonable but lacking dividend support.

Positive Factors

High gross and net margins

Sustained high gross margin indicates a scalable marketplace model with low direct costs to each transaction, enabling durable profitability. Combined with a positive net margin, this supports reinvestment in product, marketing, and platform improvements without immediate reliance on external funding.

Marketplace + fintech ecosystem

Owning both a C2C marketplace and an integrated payments service creates cross-selling and retention advantages. Structural synergies (payments, identity verification, shipping) deepen user stickiness, increase lifetime value, and diversify monetization beyond pure listing/commission economics over the medium term.

Strong return on equity and operating efficiency

A high ROE signals efficient capital deployment and the ability to generate attractive returns from existing equity. When paired with solid EBIT/EBITDA margins, it suggests management can scale revenue without proportionate capital increases, supporting sustainable profitability and potential internal funding for growth.

Negative Factors

Elevated financial leverage

A elevated debt-to-equity ratio increases financial vulnerability to interest rate rises or revenue shocks. Over a multi-month horizon, high leverage can constrain strategic flexibility, force deleveraging priorities, and raise refinancing risk, particularly if cash generation remains inconsistent.

Poor cash flow conversion and FCF volatility

Sharp negative FCF growth and weak OCF-to-income conversion indicate earnings are not reliably translating into cash. This undermines the firm's ability to service debt, fund investments, and return capital, creating a structural operational risk until cash conversion improves.

Revenue dependent on GMV and transaction counts

Reliance on GMV and transaction frequency makes revenue sensitive to user activity and macro consumer trends. Structural shifts in consumption or competition that reduce transactions would directly pressure revenues, making long-term growth contingent on maintaining or growing marketplace engagement.

Mercari Business Overview & Revenue Model

Company Description

Mercari, Inc. engages in the planning, development, and operation of the Mercari marketplace applications in Japan and the United States. Mercari, Inc. was incorporated in 2013 and is based in Tokyo, Japan.

How the Company Makes Money

Mercari generates revenue primarily through transaction fees charged on sales made through its platform. When a seller lists an item and successfully sells it, Mercari takes a percentage of the sale price as a fee, which typically ranges from 10% to 20%. Additionally, the company earns revenue from optional services such as promoted listings that help sellers increase the visibility of their products. Mercari also benefits from partnerships with shipping companies that facilitate faster delivery options, enhancing the user experience and encouraging more transactions. The combination of these revenue streams allows Mercari to sustain its operations and invest in further growth and development of its marketplace.

Mercari Financial Statement Overview

Summary

Strong profitability (71.77% gross margin, 13.56% net margin) and solid operating efficiency (15.35% EBIT margin) support a high score, but it is held back by elevated leverage (2.01 debt-to-equity) and weak cash-flow trends including sharply negative free cash flow growth (-219.16%) and difficulty converting earnings into operating cash.

Income Statement

Mercari's income statement shows strong profitability with a gross profit margin of 71.77% and a net profit margin of 13.56% for TTM. The company has demonstrated consistent revenue growth, with a 2.34% increase in the latest period. EBIT and EBITDA margins are healthy at 15.35% and 16.30%, respectively, indicating efficient operations. Overall, the income statement reflects a robust financial performance with positive growth trends.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.01, suggesting significant leverage, which could pose a risk if not managed carefully. However, the return on equity is strong at 30.86%, indicating effective use of equity to generate profits. The equity ratio stands at 18.82%, showing a moderate level of equity financing. While the company is profitable, the high leverage warrants caution.

Cash Flow

Cash flow analysis shows a concerning trend with negative free cash flow growth of -219.16% in the TTM period. The operating cash flow to net income ratio is negative, indicating challenges in converting income into cash. However, the free cash flow to net income ratio is slightly above 1, suggesting that free cash flow covers net income. The cash flow statement highlights potential liquidity issues that need addressing.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	197.15B	192.63B	187.41B	171.97B	147.05B	106.11B
Gross Profit	142.87B	138.26B	129.73B	114.42B	95.14B	81.80B
EBITDA	35.03B	31.62B	20.42B	19.63B	-3.04B	13.06B
Net Income	28.17B	26.11B	13.46B	13.11B	-7.57B	5.72B
Balance Sheet
Total Assets	556.79B	543.76B	501.77B	415.29B	339.86B	262.53B
Cash, Cash Equivalents and Short-Term Investments	148.56B	147.03B	197.31B	204.73B	218.85B	171.46B
Total Debt	203.87B	199.38B	193.31B	160.55B	131.35B	71.15B
Total Liabilities	451.63B	444.12B	429.63B	360.06B	301.87B	222.52B
Stockholders Equity	104.81B	99.27B	71.84B	55.35B	37.68B	39.63B
Cash Flow
Free Cash Flow	14.60B	-12.25B	-43.49B	-36.40B	-26.89B	2.95B
Operating Cash Flow	14.93B	-11.95B	-43.34B	-35.82B	-26.22B	3.37B
Investing Cash Flow	-52.72B	-31.36B	-877.00M	-601.00M	-671.00M	6.91B
Financing Cash Flow	23.32B	504.00M	32.09B	25.17B	62.06B	19.77B

Mercari Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2932.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4385, the sentiment is Neutral. The current price of 2932 is below the 20-day moving average (MA) of 3215.15, below the 50-day MA of 3069.36, and above the 200-day MA of 2560.78, indicating a neutral trend. The MACD of 58.06 indicates Positive momentum. The RSI at 50.78 is Neutral, neither overbought nor oversold. The STOCH value of 58.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4385.

Mercari Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3964	81 Outperform	¥100.66B	17.83	―	2.24%	22.22%	26.29%
7685	76 Outperform	¥149.82B	29.55	―	0.64%	57.01%	91.03%
4385	74 Outperform	¥525.83B	18.62	31.11%	―	4.83%	106.29%
3064	69 Neutral	¥1.06T	33.38	28.71%	1.03%	14.16%	26.13%
3092	65 Neutral	¥1.01T	21.76	47.74%	2.82%	6.80%	0.62%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
4755	46 Neutral	$2.00T	-12.19	-21.14%	―	11.45%	42.34%

Mercari Corporate Events

Mercari Reports Strong Q3 2025 Financial Results

Mercari, Inc. reported strong financial results for the three months ended September 30, 2025, with a notable increase in revenue and profits compared to the previous year. The company’s revenue grew by 10.1%, and operating profit more than doubled, reflecting a robust performance in its core operations. This financial growth indicates a positive trajectory for Mercari, enhancing its position in the e-commerce market and potentially benefiting stakeholders.

The most recent analyst rating on (JP:4385) stock is a Buy with a Yen2531.00 price target. To see the full list of analyst forecasts on Mercari stock, see the JP:4385 Stock Forecast page.